United States v. Menaged

United States District Court, D. Arizona

June 12, 2017

United States of America, Plaintiff,v.Yomtov Scott Menaged, Defendant.

DETENTION ORDER

Honorable John Z. Boyle United States Magistrate Judge

The
Government requests Defendant be detained as a flight risk
and an economic danger to the community. The Court heard
argument from the parties on June 6, 2016. The Court has also
considered a memorandum/motion, exhibits, and proffers of the
parties. The Court finds detention as a flight risk is
required under the Bail Reform Act. The Court does not find
Defendant is a danger to the community.

I.
Factual and Procedural Background

Defendant,
age 40, is a United States citizen who has lived in the
community for the past 15 years. Prior to 2002, he lived in
New York. He has two children, ages 15 and 2. He reports that
he is in the midst of a divorce, and plans to move from his
current home. He has no criminal history. There is no
evidence of alcohol or drug abuse. He has three siblings in
Arizona, with whom he has weekly contact. Defendant's
ex-wife, sister, and mother submitted letters to the Court
that strongly speak of him as a loving father and family man.
(Exhibits 1-3.) Defendant's family members were present
in court for the detention hearing. Defendant maintains close
contact with his father, Joseph Menaged.

Defendant
was the owner and operator of furniture store businesses,
which include American Furniture and Furniture King. He was
also involved in significant real-estate investment in the
Phoenix area. According to the declaration of Special Agent
Byron Anderton, Defendant used at least two different Social
Security Numbers and two separate dates of birth to conduct
business transactions. (Doc. 31-1 at 3.) He had signatory
authority over at least 28 separate bank accounts from five
financial institutions. (Id. at 6.) Between January
2013 through June 2016, Defendant obtained loans related to
his businesses totaling approximately $734, 484, 440.67.
(Id.) On April 20, 2016, Defendant filed for Chapter
7 bankruptcy in the District of Arizona. As of April 4, 2017,
approximately $132, 241, 306.00 in claims were registered
against Defendant. (Id.) According to Special Agent
Anderton, Defendant “wired or electronically
transferred millions of dollars to bank accounts in the names
of friends and family members.” (Id. at 9.)
Between “2015 and the present, Menaged transferred
approximately $1, 033, 808.28 to a Bank United account held
in the name of his father.” (Id.) On July 24,
2016, the balance of that account was approximately $2, 403,
673.15. (Id.) Defendant's father is a United
States citizen born in Israel. One week after Defendant's
arrest, Defendant's father traveled to Israel. Defendant
proffers that Joseph Menaged may have traveled to Israel to
supervise a real estate sale.

According
to Special Agent Anderton, Defendant was recorded telling
another person that Defendant had $30, 000, 000 in an
offshore account. (Id. at 7.) The government
provided no evidence of an offshore account managed by
Defendant. From 2014 to 2017, gambling receipts from Wild
Horse Pass Casino in Chandler reflect that Defendant and his
wife cashed out approximately $1, 467, 014.000 in gambling
funds. (Id. at 9.) Defendant reported to Pretrial
Services that he currently has $2, 000 in cash but no
checking or savings account. (Doc. 11 at 3.) He reports that
he has $250, 000 in credit card debt and a $150, 000 tax lean
for unpaid taxes. (Id.)

The
Indictment alleges Defendant was involved in a conspiracy to
defraud resulting in losses of “at least $2, 112,
405.97.” (Doc. 3 at 13.) Defendant is charged in all 24
counts of the Indictment. (Id.)

II.
The Bail Reform Act

The
Government seeks the detention of Defendant on the grounds
that he is 1) a serious flight risk and no release condition
or combination of conditions exist that would reasonably
assure his appearance at future court proceedings if
released, and 2) an economic danger to the community. After
considering the memoranda, exhibits, proffers, argument, and
all of the factors set forth in 18 U.S.C. § 3142(g), the
Court finds that the Government has proven by a preponderance
of the evidence that Defendant is a serious flight risk and
no combination of conditions exist that would reasonably
assure his appearance at future court proceedings.

a.
Standard of Review

The
Bail Reform Act, 18 U.S.C. §§ 3141-3150, mandates
the release of a person pending trial unless the court
“[f]inds that no condition or combination of conditions
will reasonably assure the appearance of the person as
required and the safety of any other person and the
community.” United States v. Hir, 517 F.3d
1081, 1086 (9th Cir. 2008) (quoting 18 U.S.C. §
3142(e)). This Court engages in a two-step inquiry before
ordering a defendant either be released or detained pending
trial. First, the Court must determine whether the defendant
presents a “serious risk that [the defendant] will
flee, ” if released from custody. 18 U.S.C. §
3142(f)(2)(A)). Second, if the defendant is likely to flee,
the Court must determine whether some set of conditions would
sufficiently vitiate that risk. 18 U.S.C. § 3142(g). The
government bears the burden of showing by a preponderance of
the evidence that the defendant poses a flight risk.
United States v. Gebro, 948 F.2d 1118, 1121 (9th
Cir. 1991).

In
determining whether release conditions exist that would
reasonably assure a defendant's appearance, Section
3142(g) requires a district court to consider the following
factors:

(1) the nature and circumstances of the offense charged,
including whether the offense is a crime of violence, a
violation of section 1591, a Federal crime of terrorism, or
involves a minor victim or a controlled ...

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